Buying property in MadeiraAfter the promissory contract: what the buyer needs to do if using a mortgage
By Jorge Barbosa
Jul 1, 2007 - 5:39:27 PM

Once the loan for a mortgage has been approved by a lending institution the buyer has to proceed with a provisional registration of acquisition and mortgage of the property in his or her name at the
"Conservatória do Registo Predial" (the "Office for Property Registration") pertaining to the municipality under which the property falls. So, if you bought a property in, say Funchal, then you would go to the
"Conservatória do Registo Predial do Funchal".

Note, you can only go the the property registration office after the lending institution has approved the loan/mortgage - and then only after they have given you a
"minuta" (a declaration or a memo) under which the terms of the provisional registration should be made.

The provisional registration of a property under the acquistor's name is held for a maximum of six months. That is, the
"Conservatória do Registo Predial" holds for a period of 180 days, from the date the request was made, a provisional registration to allow time for the
"escritura" (deed or transfer of title) to take place. After 180 days the provisional registration expires and reverts to the former owner's details if the house purchase did not complete or, if it has been transferred successfully to the new buyer, will appear with the names and mortgage details of the new owners.

Note: for some of our foreign readers, who want to be very correct in their property purchase, please read carefully:
if you are a cash buyer you do not need to do a provisional registration. Registration of the property is done after the deeds are signed and the house transferred (your well appointed lawyer will do this for you). Provisional registration is merely a technical need for lending institutions to guarantee the smooth running of the mortgage process and its registration. (You will drive the lawyer and the real estate agent up the wall if you try to "provisionally register" the property in your name prior to the actual completion of the purchase of the house if you are a straightforward cash buyer! You just don't do that sort of thing in Portugal).

Apart from the aforementioned registrations the buyer should also petition the
"Conservatória do Registo Predial" a document called the
"Certidão de Teor do Imóvel" (or certificate of all the notes/declarative contents of the registration as it stands under the registry). To be able to petition this certificate you need to present the
"Caderneta Predial" (Property Card) - either the
"urbana" (urban) or
"rústica" (rustic) version, depending on the type of property you are buying.

"Urbana" (Urban) properties in a simple way means that the property is linked into an urban town plan or that it has a building on the property.
"Rústica" (rustic) properties usually have no buildings on them and are quite often outside of major urbanised areas. However, there are still a lot of rustic properties in even huge town or city centres. In some cases there are buildings on rustic properties - but this is because they are either very old - pre-1954 structures - or are structures built with no permission granted (or, in other cases, that permission is forthcoming).

In those cases where there is no
"Caderneta Predial" (Property Card) for an urban property, especially for buildings that are, for example, still being built, you may then present a document called the
"Pedido de Inscrição na Matriz" (proof of the request of the property to be inscribed on the property matrix) issued by the
"Repartição de Finanças" (department of finance or tax office) local to the municipality under which the property falls.

Once the
"escritura" (the
deed or completion of the transfer of title) of the property is done
then the bank that awarded the loan for a mortgage to the buyer will convert the
"provisional registrations of the property" into its final definitive
version. That is, the bank or lending institution converts the property registration from its
"provisória" version into its
"definitiva" version.

Only after that has completed successfully can the buyer claim rightful title to the property,
albeit with a mortgage, and proceed with any use or future sale of
it.